SME Association of Malaysia lauds the initiatives being undertaken by the government to mitigate the impact of the Covid-19 pandemic on the economy. These measures have indeed been useful in easing the unprecedented difficulties faced by Small and Medium Enterprises (SMEs) during this particularly challenging period.
As we adapt to the new norms that have dawned upon us in a post-pandemic world, the current ecosystem for international trade would also benefit from a long-overdue update. We do not have to look far for this update as there are tools within our reach to foster an enabling environment that would be pivotal for the survival of Malaysian SMEs.
One such tool is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Malaysia, along with 10 other countries, signed the CPTPP in 2018, which was considered as Year 1 of the Agreement. Next year will mark Year 5 of the CPTPP.
Over these past four years, while the CPTPP has been enforced and implemented by eight countries, all of which are currently enjoying the concessions and other preferences offered by the Agreement, Malaysia has been unfortunately left behind.
And, more importantly, Malaysian SMEs have been left behind while our regional competitors, most notably from Vietnam, are racing ahead of us.
As such, we strongly call upon the government to ratify the CPTPP without further delay. An expeditious ratification of this Agreement will ensure that Malaysian SMEs could finally reap the benefits offered by the CPTPP.
The longer we wait, the more we will lose out, as we run the significant risk of being displaced in key export markets by our regional competitors.
The CPTPP offers elimination of tariffs and reduction in non-tariff barriers (NTBs) in the export markets of all 11 countries that are party to it.
It must be underscored that all types of trade costs, including and particularly NTBs, adversely affect the ability of SMEs to effectively participate in international trade transactions. Since SMEs are more sensitive to trade barriers compared with large firms, removing such obstacles will bring tangible benefits to them.
We also look forward to the CPTPP assisting in the reduction of administration costs and strengthening the resilience of Malaysian SMEs’ supply chains. The CPTPP will likely enable Malaysian SMEs to source for cost-effective raw materials as well as parts and components from a wider variety of partners within the member countries.
The CPTPP also contains specific provisions for the establishment of an SME committee, the aim of which is to provide a dedicated forum to discuss best practices by member parties.
It would enable more comprehensive participation by SMEs in global supply chains as well as provide facilitation for SMEs through capacity building and technical assistance programmes.
In short, a high-standard, high-quality trade agreement such as the CPTPP will serve as a catalytic tool in facilitating economic recovery and reinvigorating sustainable growth for Malaysia, particularly SMEs, during the post-Covid phase.
Therefore, we once again call upon the government to act swiftly and ratify the CPTPP soonest.
DING HONG SING , National President, SME Association of Malaysia